Pfluger v. Wilshusen — 44 N.Y. St. Rep. 301

Majority

p. 301

Christopher Pfluger, Resp’t, v. John Wilshusen, App’lt.

(New York Common Pleas, General Term,

Filed February 1, 1892.)

Headnote

1. Bills and notes—Accommodation—Contribution—Consideration.

Where the accommodation maker and accommodation endorser of a negotiable note, after a judgment recovered by an endorser, agree that they will share equally their liability on the note, the agreement is void for want of consideration

3. Same—Charge to jury.

In an action on such an agreement, where there was evidence that the plaintiff was to share in the proceeds of the note with the person accommodated, it is error for tne court to charge ‘ ‘ that it is immaterial what the relations were between .the parties, whether they were endorsers for a consideration or not,” where it does not appear but that plaintiff was principal, and, therefore, primarily liable, in which case defendant’s agreement to release him from liability would be without consideration.

Appeal from judgment bf general term, city court, affirming judgment on verdict. Action by an alleged accommodation maker of a note against an accommodation endorser, upon an alleged agreement of contribution.

Samuel G. Adams, for app’lt; Eugene H. Pomeroy, for resp’t

The note was made by the plaintiff, endorsed by the defendant for accommodation at the request of the plaintiff, and then endorsed and negotiated by Frederick Pffuger.

Plaintiff’s contention is that both he and the defendant were parties to the note for the accommodation of Frederick Pfluger. Assuming the fact to be so, then, in the absence of a special agreement, the plaintiff would have no right to contribution from the defendant, for successive accommodation parties are not co-sureties as between themselves. Kelly v. Burroughs, 102 N. Y., 93 ; 1 St. Rep., 161 ; Easterly v. Barber, 66 N. Y., 433 ; McDonald v. Magruder, 3 Peters, 470; Shaw v. Knox, 98 Mass., 214 ; Hillegas v. Stephenson, 75 Mo., 118 ; McGurk v. Huggett, 56 Mich., 187 ; Phillips v. Plato, 42 Hun., 189 ; 5 St. Rep., 124 .

But, by express agreement, successive parties on accommodation paper may establish between themselves the relation of co-sureties, and so be reciprocally entitled to contribution. Easterly v. Barber, 3 T. & C., 421; 66 N. Y., 433 ; Seward v. Huntington, 94 id, 104, 113. Plaintiff gave evidence of such an agreement; but the agreement was not made at the time they became parties to the paper, nor until their mutual rights and liabilities had been fixed by a judgment against them at the suit of an endorsee. At that moment the defendant was entitled to complete indemnity from the plaintiff; and without more, there was manifestly no consideration to uphold defendant’s agreement for contribution.

Assuming, however, that such an agreement would have been valid, still the learned trial justice put the case to the jury on a theory which ignored the relation of plaintiff and defendant as accommodation parties. He said: “I charge you that it is immaterial what the relations were between the parties, whether they were endorsers for a consideration or not ” There was cogent evidence that the defendant endorsed for the accommodation of

p. 302

the plaintiff and his brother Frederick, partners in the building business, and that plaintiff had the benefit of the money realized by the discount of the note. Under the charge the verdict does-not determine but that the plaintiff was, as principal, primarily liable on the note; and if so, there was no consideration for the-discharge of that liability by the defendant

Waiving, however, even the objection and yet it is impossible-to sustain the judgment.

The agreement alleged by the plaintiff was that the defendant-“should pay over to him one-half of the amount he should receive or collect on the judgment" meaning the judgment obtained by the endorsee against the parties, and which had been assigned to the defendant. The proof was that the defendant had received $888 from the wife of Frederick Pfiuger, in pursuance of her promise .to indemnify him for any sum he might pay on account of the endorsement. Co-sureties are entitledto the benefit of any security or payment by their principal; but not of any security or payment by a third party. Seward v. Huntington, 94 N. Y., 104 , 114. Recognizing this distinction, the learned trial justice charged, that, if the jury believed that the money paid to defendant by Mrs. Pfiuger “ was so paid as a mere subterfuge and that it was really money belonging to Frederick Pfiuger, and was really paid on account of this judgment, then your verdict must be for the plaintiff.” Mow, there was not a scintilla of evidence in thecasetending to show that the money was the money of Frederick Pfiuger, Kelly v. Burroughs, 102 N. Y., 93 ; 1 St. Rep., 161 ; and so, for aught we can know, the verdict went against the defendant upon a supposed fact utterly without proof authorizing the jury to find it.

Judgment reversed and new trial ordered, costs to abide the-event.

Bookstaver, J., concurs.